The opinion of the court was delivered by: LACEY
Plaintiffs, recipients of welfare benefits, have filed these actions under the Civil Rights Act of 1871, 42 U.S.C. § 1983, seeking a declaratory judgment and injunctive relief,
as well as damages. In addition, they assert a cause of action under Titles IV and XVI of the Social Security Act. 42 U.S.C. §§ 601 et seq. and 1381 et seq. The defendants are Irving Engelman, Director of the Division of Public Welfare of New Jersey's Department of Institutions and Agencies; Stella Cassi, Director of the Bergen County Welfare Board, and Philip Lazaro, Director of the Essex County Welfare Board.
The named plaintiffs in the first action filed are Sam and Geraldine Serritella, and Marilyn Elassar. The motion of Earl and Clara Evans to intervene therein [Fed. R. Civ. P. 24(b)] is hereby granted. This action has been consolidated for all purposes with Simmons v. Engelman, et al., subsequently filed in this Court, and raising identical issues.
There are before the Court at this time various motions. Plaintiffs have moved for a preliminary injunction and for an order determining that these matters may be maintained in class action form under Fed. R. Civ. P. 23. Defendants, at the same time, have moved to dismiss the complaint on the grounds that this Court lacks subject matter jurisdiction; that the plaintiffs lack standing to sue; and that the claims at issue must be tried to a three-judge court. Defendants also move under Fed. R. Civ. P. 19 for leave to file a third-party complaint against the Department of Health, Education and Welfare (HEW).
The plaintiffs, seeking to represent all recipients of public assistance under the federally aided Aid to Dependent Children (ADC)
and Aid to the Aged, Blind and Disabled (AABD)
programs, both administered by county welfare boards under Mr. Engelman's supervision, advance two claims. One is constitutional, the other statutory; and at the heart of each is the fact that plaintiffs suffered either termination or reduction of welfare benefits by action of their county welfare boards, without a hearing, in violation of Due Process standards articulated in Goldberg v. Kelly, 397 U.S. 254, 90 S. Ct. 1011, 25 L. Ed. 2d 287 (1970) [hereinafter Goldberg ] and pertinent New Jersey regulations.
Further, in connection with the statutory claim, plaintiffs allege that defendants have, to plaintiffs' damage, wilfully refused to comply with a certain HEW regulation, 45 C.F.R. § 205.10, 36 Fed. Reg. 3034 (1971) [hereinafter Reg. 205.10]. This regulation implements the "fair hearing" requirements of the Social Security Act through HEW's rule-making power. [ 42 U.S.C.A. § 1302]
Reg. 205.10 requires a 15-day notice of any state action adverse to a welfare recipient.
In addition, and more significantly, it provides that assistance is to be continued without reduction or termination until, if requested, an adverse fair hearing decision is rendered on the state level. This is the only administrative review required by Reg. 205.10.
New Jersey's regulations provide a pretermination or prereduction hearing on the county level with the right of the welfare recipient to request thereafter a fair hearing on the state level if the county action is adverse. In New Jersey, however, contrary to Reg. 205.10, benefits cease or are reduced after a county hearing adverse to the recipient.
Thus, the recipient does not receive the disputed benefits while he awaits his state fair hearing.
Plaintiffs Sam and Geraldine Serritella were recipients of public assistance under the ADC program. In June, 1971, they allegedly received a telephone message from their county welfare board, confirmed shortly thereafter by letter, that their assistance would be terminated immediately because of a new state law. Assistance was in fact terminated July 1, 1971. There was no hearing. Mr. Serritella then became employed but left after a short time, allegedly because of poor health. He then sought assistance under the Aid to Families of the Working Poor (AFWP) program,
but was rejected under a regulation barring assistance to one voluntarily ceasing employment within 90 days of application.
In August, 1971, counsel for the Serritellas was notified by letter from a county welfare board supervisor that the Serritella ADC termination was not due to a change in state law, as had earlier been stated, but to a decision of a medical review board that Mr. Serritella was not disabled. Counsel for Mr. Serritella requested a state level hearing, which was held on September 27, 1971. No decision has yet been rendered. This request for a hearing does not, of course, eliminate or render moot the allegations in his complaint.
Plaintiff Elassar was also receiving ADC assistance. On July 29, 1971, she allegedly received notice by telephone from her county welfare board that her grant would be reduced from $290 to $225 monthly. Reduction shortly followed, based upon a state regulation which disallowed deductions from income paid to "legally responsible relatives" for child care expenses.
The county's notification to her of a right to a local hearing was deficient on its face.
Her counsel then requested a state-level hearing, raising the aforesaid notice defect, the inapplicability of the particular regulation, and the fact that Reg. 205.10 was not being followed. This hearing was held on November 3, 1971, and decided adversely to her in all respects on December 15, 1971.
The allegations of the Evans complaint are not unlike those of the Serritellas, charging termination of ADC assistance after notice by telephone and without a hearing. Mr. and Mrs. Simmons suffered termination in a like manner.
Defendants first move to dismiss the Serritella-Elassar complaint on the ground that they lack standing to maintain this action.
. . . [The] question of standing is related only to whether the dispute sought to be adjudicated will be presented in an adversary context and in a form historically viewed as capable of judicial resolution. . . .
Our task, therefore, is to determine whether these plaintiffs satisfy the test for determining whether a "case or controversy" exists and whether the interests of these individuals are such as to promote a truly adversary proceeding. This test, contained in Association of Data Processing Service Organizations v. Camp, 397 U.S. 150, 152-153, 90 S. Ct. 827, 829-830, 25 L. Ed. 2d 184 (1970), is:
. . . [Whether] the plaintiff alleges that the challenged action has caused him injury in fact, economic or otherwise . . ..
. . . [Whether] the interest sought to be protected by the complainant is arguably within the zone of interests to be protected or regulated by the statute or constitutional guarantee. . . .
See also Investment Company Institute v. Camp, 401 U.S. 617, 91 S. Ct. 1091, 28 L. Ed. 2d 367 (1971); Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 91 S. Ct. 814, 28 L. Ed. 2d 136 (1971); Barlow v. Collins, 397 U.S. 159, 90 S. Ct. 832, 25 L. Ed. 2d 192 (1970); Kramer v. Government of Virgin Islands, 453 F.2d 1246 (3 Cir. 1971); Contractors Association of Eastern Pennsylvania v. Hodgson, 442 F.2d 159 (3 Cir. 1971), cert. denied, 404 U.S. 854, 92 S. Ct. 98, 30 L. Ed. 2d 95 (1971); Cape May County Chapter, Inc., Izaak Walton League of America v. Macchia, 329 F. Supp. 504 (D.N.J. 1971).
As to the Serritellas, defendants' argument of lack of standing is based on the affidavit of a county board caseworker who states that they voluntarily removed themselves from public assistance. Mrs. Serritella's affidavit admits that she told a caseworker that her husband had taken a job (evidently the one he had for a short time and left because of health reasons) and that she no longer wished to be on welfare.
Defendants' contention would be acceptable if we were to find that Mrs. Serritella had voluntarily removed herself and her family from public assistance. Such a finding is, however, unjustified. There was no voluntary relinquishment of ADC benefits; the aforesaid conversation followed by two weeks the now disputed county termination action. Under these circumstances, we find that the Serritellas have been injured, that they have not waived their remedies, and have "standing," as defendants define it, to bring this action. Association of Data Processing Service Organizations v. Camp, supra; cf. National Welfare Rights Organization v. Finch, 139 U.S. App. D.C. 46, 429 F.2d 725 (D.C. Cir. 1970).
In view of our holding as to the Serritellas, we need not concern ourselves with defendants' argument that Mrs. Elassar lacks standing. Accordingly, we will defer a determination on that issue.
Defendants do not at this time challenge the standing herein of the Simmons and Evans families. However, as previously noted, their claims pose issues similar to those in the Serritella complaint, and would have, if challenged, received the same disposition.
Defendants having traversed subject matter jurisdiction, we shall first examine our power to hear this suit.
Plaintiffs allege jurisdiction under 28 U.S.C. §§ 1331, 1337, 1343, and 2201. The latter section dealing with the Declaratory Judgment Act does not confer jurisdiction which is otherwise lacking. Skelly Oil v. Phillips Petroleum, 339 U.S. 667, 70 S. Ct. 876, 94 L. Ed. 1194 (1950); Spencer v. Kugler, 454 F.2d 839 (3 Cir. 1972); McCahill v. Borough of Fox Chapel, 438 F.2d 213 (3 Cir. 1971). We likewise reject the notion that § 1337 confers jurisdiction. The Social Security Act is not an act "regulating commerce or protecting trade and commerce against restraints and monopolies." Cf. Potrero Hill Community Action Committee v. Housing Authority, 410 F.2d 974 (9 Cir. 1969). Nor need we deal with the problem of asserted § 1331 jurisdiction. [ see footnote 19 infra ]
Instead, we address ourselves to whether jurisdiction under 28 U.S.C. § 1343(3) may be invoked by a claimant alleging a violation of 42 U.S.C. § 1983. Section 1343(3) grants jurisdiction to a District Court
To redress the deprivation, under color of any State law, statute, ordinance, regulation, custom or usage, of any right, privilege or immunity secured by the Constitution of the United States or by any Act of Congress providing for equal rights of citizens or of all persons within the jurisdiction of the United States. [emphasis supplied]
We are constrained to accept plaintiffs' position that the constitutional claim presented is a substantial one. It is virtually undisputed that the Serritella, Evans, and Simmons families were terminated from the ADC welfare rolls without the Due Process hearing mandated by the Supreme Court in Goldberg.
In addition, these actions contain an unresolved constitutional claim, namely, in the case of plaintiff Elassar, the question of whether a prereduction hearing is constitutionally required in all instances. The New Jersey regulations provide such a hearing,
but the Due Process dimensions are unclear in that Goldberg dealt only with terminations. See Daniel v. Goliday, 398 U.S. 73, 90 S. Ct. 1722, 26 L. Ed. 2d 57 (1970); Wheeler v. Montgomery, 397 U.S. 282, 284-285, 90 S. Ct. 1026, 25 L. Ed. 2d 307 (1970) (Burger, C.J., dissenting). Whatever the answer to this question may be, certainly the question itself is a substantial one within § 1343(3).
Defendants further argue, however, that jurisdiction fails because of Mr. Justice Stone's now famous "personal right-property right" distinction in Hague v. CIO, 307 U.S. 496, 531-532, 59 S. Ct. 954, 83 L. Ed. 1423 (1939). See also Eisen v. Eastman, 421 F.2d 560 (2 Cir. 1969).18a Under this argument, the receipt of welfare benefits, it is claimed, is not a "personal right" and therefore the interest of the recipient is insufficient to sustain § 1343(3) jurisdiction.
This Court recognizes the validity of the Stone formulation in this Circuit. National Land and Investment Co. v. Specter, 428 F.2d 91 (3 Cir. 1970). However, its validity is one thing; its applicability to the case at bar another.
First, it must be recognized that the receipt of welfare benefits is a matter of "statutory entitlement for persons qualified to receive them." Goldberg, 397 U.S. at 262, 90 S. Ct. at 1017; and of course we need not discourse on whether welfare is a privilege or a right. See Shapiro v. Thompson, 394 U.S. 618, 627 n. 6, 89 S. Ct. 1322, 22 L. Ed. 2d 600 (1969). Moreover, the authorities seem to ignore the Stone distinction where substantial claims of welfare recipients are involved. It is apparent why. Welfare benefits usually involve those at such a low economic level that it is proper to view these entitlements as rights